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Swedencare

Swedencare

Premium animal health products

Swedencare is a high-growth, M&A-driven animal health company that develops, promotes and produces products mainly within Dematology, Neutraceuticals and Odontology for Pets, both under its multi-brand umbrella but also as a CDMO. Through an active M&A agenda, the company has gone from 2019 sales of SEK 127m to a PF Q3’21 LTM sales of SEK 1.6bn in two years, with an EBITDA margin of 29%. The products are sold globally, but after the M&A, the company is mainly active in the US, with >80% of PF sales coming from the region.

Margin expansion from selling high margin ”PlaqueOff Powder ingredient” to food producers. Growth potential from continued launch of new products and/or products on new markets. We view China, Russia and Brazil as interesting growth markets. The net cash position and solid cash generation also leave room for more M&A and/or future dividends.

Having increased its size by roughly tenfold in two years through acquisitions, we see potential risks related to integration and extracting synergies. Furthermore, with the animal health space consolidating quickly, the sector is attracting increasing interest from financial and strategic buyers, pushing up M&A multiples. Being one of the consolidators, this risk also affects Swedencare if multiples continue to rise.

SEKm 2021 2022e 2023e
Lease adj. FCF yield (%) -18,9 -31,2 2,2
Lease adj. ND/EBITDA 3,2 2,5 1,6
Sales 773 1926 2399
Sales growth (%) 221,8 149,1 24,5
EBITDA 138 484 655
EBITDA margin (%) 17,9 25,1 27,3
EBIT adj 86 299 429
EBIT adj margin (%) 11,1 15,5 17,9
Pretax profit 57 243 409
EPS rep 0,49 1,14 1,86
EPS growth (%) 19 134,3 63,2
EPS adj 1,14 2,24 2,74
DPS 0,2 0,46 0,74
EV/EBITDA (x) 129,1 31,2 22,8
EV/EBIT adj (x) 208,6 50,5 34,8
P/E (x) 316,4 76,2 46,7
P/E adj (x) 134,9 38,8 31,6
EV/sales (x) 23,1 7,8 6,2
FCF yield (%) -18,8 -31 2,4
Dividend yield (%) 0,1 0,5 0,9
Net IB debt/EBITDA 4,2 3 1,9
SEKm 2021 2022e 2023e
Depreciation and amortisation -20 -86 -86
Of which leasing depreciation -10 -28 -28
EO items -20 -37 0
Impairment and PPA amortisation -53 -136 -140
EBITDA lease Adj 150 498 627
EBITDA lease Adj margin (%) 19,3 25,9 26,1
Sales 773 1926 2399
COGS -385 -839 -1015
Gross profit 389 1087 1384
Other operating items -250 -603 -729
EBITDA 138 484 655
Depreciation on tangibles -3 -4 -5
Depreciation on intangibles 0 0 0
EBITA 119 398 569
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 65 263 429
Other financial items 0 0 0
Net financial items -9 -20 -20
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 57 243 409
Tax -2 -64 -115
Net profit 55 179 294
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 55 179 294
EPS 0,49 1,14 1,86
EPS Adj 1,14 2,24 2,74
Total extraordinary items after tax -20,2 -36,8 0
Tax rate (%) -4 -26,2 -28,2
Gross margin (%) 50,3 56,4 57,7
EBITDA margin (%) 17,9 25,1 27,3
EBITA margin (%) 15,4 20,7 23,7
EBIT margin (%) 8,5 13,6 17,9
Pretax margin (%) 7,4 12,6 17,1
Net margin (%) 7,1 9,3 12,3
Growth rates Y/Y 2021 2022 2023
Sales growth (%) 221,8 149,1 24,5
EBITDA growth (%) 152,2 249,7 35,3
EBIT growth (%) 50,4 301,2 63,5
Net profit growth (%) 54 228,2 64
EPS growth (%) 19 134,3 63,2
Profitability 2021 2022 2023
ROE (%) 3,3 4 4,4
ROE Adj (%) 7,7 7,8 6,4
ROCE (%) 3,1 4,6 5,2
ROCE Adj(%) 6,6 7,7 6,8
ROIC (%) 3,3 3,5 3,8
ROIC Adj (%) 4,3 4 3,8
Adj earnings numbers 2021 2022 2023
EBITDA Adj 159 521 655
EBITDA Adj margin (%) 20,5 27 27,3
EBITA Adj 139 435 569
EBITA Adj margin (%) 18 22,6 23,7
EBIT Adj 86 299 429
EBIT Adj margin (%) 11,1 15,5 17,9
Pretax profit Adj 130 416 549
Net profit Adj 128 352 434
Net profit to shareholders Adj 128 352 434
Net Adj margin (%) 16,6 18,3 18,1
Leasing payments -9 -22 -28
SEKm 2021 2022e 2023e
Lease liability amortisation -9 -22 -28
Other intangible assets 1464 3373 3233
Right-of-use asset 104 219 219
Total other fixed assets 5 7 7
Leasing liability 105 228 228
Total other long-term liabilities 233 795 795
Net IB debt excl. leasing 476 1229 1000
Net IB debt / EBITDA lease Adj (%) 318,2 246,6 159,5
EBITDA 138 484 655
Net financial items -9 -20 -20
Paid tax -2 -64 -115
Non-cash items 0 0 0
Cash flow before change in WC 128 401 520
Change in WC -4 -145 -99
Operating cash flow 124 256 420
CAPEX tangible fixed assets -24 -70 -91
CAPEX intangible fixed assets -1 -1 0
Acquisitions and disposals -3349 -4418 0
Free cash flow -3250 -4233 329
Dividend paid -69 -22 -72
Share issues and buybacks 1148 3533 0
Other non cash items 1247 -786 -38
Decrease in net IB debt 85 -38 65
Balance Sheet (SEKm) 2021 2022 2023
Goodwill 1303 4495 4495
Indefinite intangible assets 141 141 141
Definite intangible assets 0 0 0
Tangible fixed assets 144 381 414
Other fixed assets 0 0 0
Fixed assets 3019 8475 8368
Inventories 158 212 264
Receivables 110 379 472
Other current assets 47 133 166
Cash and liquid assets 136 131 360
Total assets 3471 9330 9631
Shareholders equity 2420 6620 6842
Minority 0 0 0
Total equity 2420 6620 6842
Long-term debt 617 1367 1367
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 20 20 20
Short-term debt 0 0 0
Accounts payable 36 167 208
Other current liabilities 61 154 192
Total liabilities and equity 3471 9330 9631
Net IB debt 581 1457 1227
Net IB debt excl. pension debt 581 1457 1227
Capital invested 3000 8076 8069
Working capital 219 403 503
EV breakdown 2021 2022 2023
Market cap. diluted (m) 17287 13657 13727
Net IB debt Adj 581 1457 1227
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 17867 15114 14955
Capital efficiency (%) 2021 2022 2023
Total assets turnover (%) 33,4 30,1 25,3
Capital invested turnover (%) 52,6 64 68,7
Capital employed turnover (%) 39,3 50,3 54,4
Inventories / sales (%) 16 9,4 8,1
Customer advances / sales (%) 0 0 0
Payables / sales (%) 5,1 2,9 2,3
Working capital / sales (%) 19,8 16,1 18,9
Financial risk and debt service 2021 2022 2023
Net debt / equity (%) 24 22 17,9
Net debt / market cap (%) 4,6 10,7 8,9
Equity ratio (%) 69,7 71 71
Net IB debt adj. / equity (%) 24 22 17,9
Current ratio (%) 393,6 242,6 292,6
EBITDA / net interest (%) 1617,8 2453,2 3274,4
Net IB debt / EBITDA (%) 419,5 300,9 187,4
Interest cover (%) 1388,3 2019,4 2846,9
SEKm 2021 2022e 2023e
Lease adj. FCF yield (%) -18,9 -31,2 2,2
Shares outstanding adj. 112 157 158
Fully diluted shares Adj 112 157 158
EPS 0,49 1,14 1,86
Dividend per share Adj 0,2 0,5 0,7
EPS Adj 1,14 2,24 2,74
BVPS 21,54 42,08 43,27
BVPS Adj 9,94 13,5 14,84
Net IB debt / share 5,2 9,3 7,8
Share price 113,19 86,82 86,82
Market cap. (m) 12714 13657 13727
Valuation 2021 2022 2023
P/E 316,4 76,2 46,7
EV/sales 23,11 7,85 6,23
EV/EBITDA 129,1 31,2 22,8
EV/EBITA 150,4 37,9 26,3
EV/EBIT 272,9 57,5 34,8
Dividend yield (%) 0,1 0,5 0,9
FCF yield (%) -18,8 -31 2,4
P/BVPS 7,14 2,06 2,01
P/BVPS Adj 15,48 6,43 5,85
P/E Adj 134,9 38,8 31,6
EV/EBITDA Adj 112,7 29 22,8
EV/EBITA Adj 128,6 34,7 26,3
EV/EBIT Adj 208,6 50,5 34,8
EV/cap. employed 5,7 1,8 1,8
Investment ratios 2021 2022 2023
Capex / sales 3,3 3,7 3,8
Capex / depreciation 260,3 121,9 157,8
Capex tangibles / tangible fixed assets 16,8 18,4 21,9
Capex intangibles / definite intangibles 0 0 0
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 6,9 15,2 13,9

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Media

Swedencare - Company presentation with CEO Håkan Lagerberg
Swedencare - Company presentation with CEO Håkan Lagerberg

Main shareholders - Swedencare

Main shareholders Share capital % Voting shares % Verified
Symrise AG 28.2 % 28.2 % 31 May 2022
Håkan Svanberg 14.6 % 14.6 % 31 May 2022
JCC Group Invest Sweden AB (Johan Bergdahl) 4.8 % 4.8 % 31 May 2022
AMF Pension & Fonder 3.8 % 3.8 % 31 May 2022
Mastan AB (Håkan Lagerberg) 3.5 % 3.5 % 30 Apr 2022
Första AP-fonden 3.4 % 3.4 % 31 May 2022
SEB Fonder 3.1 % 3.1 % 31 May 2022
Sellers of NaturVet 2.5 % 2.5 % 1 Feb 2022
Handelsbanken Fonder 2.4 % 2.4 % 31 May 2022
DNCA Finance S.A 2.0 % 2.0 % 31 May 2022
Source: Holdings by Modular Finance AB

Insider list - Swedencare

Name Quantity Code Date
JCC Group Invest Sweden AB + 15 000 BUY 29 Jul 2021
Håkan Svanberg +11 954 200 Received loan 19 Jul 2021
Håkan Svanberg -11 954 200 Received loan 29 Jun 2021
Håkan Svanberg - 30 000 SELL 3 May 2021
JCC Group Invest Sweden AB - 15 000 SELL 2 May 2021
JCC Group Invest Sweden AB - 15 000 SELL 2 Apr 2021
Håkan Svanberg + 750 000 Received loan 11 Jan 2021
Håkan Svanberg - 750 000 Received loan 16 Dec 2020
Håkan Svanberg +1 500 000 Received loan 24 Jul 2020
Håkan Svanberg -1 500 000 Received loan 23 Jun 2020

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